If you are starting to invest, you should feel that you need to learn several things. The real estate investments are more complicated than others due to financial, legal and diligence involved in the process requirements.
Before investing in your first property, you should familiarize yourself with the essential fundamentals of investments. In this article we present 7 basic tips for investing in real estate, taking into account the daily life of the real estate sector.
Use taxes strategically
Each sun saved in taxes is another sun released to invest, this is one of the pillars of wealth building for investors . There are many ways to save on taxes, including: provision of housing, job creation or assistance to charities.
Meeting with the accountant for a training session on tax law and determining in which investment fields you have more benefits is key.
Be focused and be disciplined
Of course, concentration and discipline can be applied to situations such as sticking to a budget and having finances in order, but what we are referring to is a bit more philosophical and is it part of the advice to invest better ? Although, don’t believe it, it’s like that!
As Jim Rohn says: “We need to work harder on ourselves than on our jobs.” We are all good at strengthening social skills, time management, sales, negotiations, public speaking or even reading more. Then, with concentration and discipline we can work on all of them to become better investors .
Earl Nightingale, writer and successful insurance broker, best known for The Strangest Secret, put it very well with a question, “Where do you see yourself based on the statistics of 100 men at 65?”
At that time (1950), the statistics were: a very rich man, four were very well-off, five were still working, 54 men depended on others and 36 had died. What Nightingale noticed was not that 36 of the men had died, but that there was a common feature in the top 5%: Everyone set goals! So set goals before investing !
Plan with purpose
We should all try to be more strategic in our investments . For example, you should know what your options are before investing. Maybe you could buy your first property with the intention of converting it into a future rental.
As Jeff Brown says: “You should have a goal in life, have passive income as soon as you can or later at retirement, and have as many assets as possible tax free.” Then to buy to invest and enjoy passive income!
Make the most of your resources
You can get benefits from many things, such as relationships, time, etc. What could you really take advantage of this year to take your business or your investment to another level? Do you know how to best use your assets? Will a good way be to accumulate more assets with good debts or eliminate all your debts?
Incorporates the formula asset protection and liquidity
How? You could apply for a personal loan with mortgage guarantee to invest more. Using your property as a backup is a way to find more money and financial solvency. Remember that properties with substantial equity not only act as asset protection, but also provide liquidity.
Stock loans were off the table for a while, but they seem to be returning and in a rising market, with a good employment rate and relatively low interest, it can be a good year to apply this investment strategy.
Another area that can be considered is how to eliminate business or investment risk. Maybe that means removing excess capital from our businesses and putting it in more diversified and secure investment channels, such as property, insurance contracts, etc.
Pay off debts
If you are not in capital accumulation mode and are thinking about how to speed up the payment of your properties, try to do so in a way that considers all risks, including the use of asset protection or estate planning.
For example, one of the default plans of many investors as they approach the retirement stage is to live in a rented apartment, so they can place their main home in a family trust. Then, when the values and interest rates go up, they sell it. In this way, you have cash without the inconvenience of owning.
So, no matter if you have a monthly mortgage, pay capital and interest next month, or if you are using a more advantageous strategy such as a savings account that pays you interest, withdraw the funds to pay the liabilities. Remember that there are many ways to reduce debts and increase cash flow.
We hope that these tips will help you define your real estate investment project, help you increase your capital and be useful in generating parallel income. Finally, we remind you that before allocating some funds for the real estate sector, you have to define what type of property you want.